Mega Backdoor Roth IRA: Is It Really Mega?

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The Mega Backdoor Roth takes investing in a traditional 401(k) to the next level for high-income earners.

The backdoor option was designed for high-income earners to make a regular Roth contribution using tax-deferred earnings.

What Is an Individual Retirement Account (IRA)?

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A Roth IRA is an individual retirement account (IRA) funded with after-tax dollars. It allows funds to grow over time without incurring taxes on the profits.

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The backdoor Roth IRA allows high-income earners to transfer funds from a traditional IRA to a Roth IRA.

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Benefits of a Mega Backdoor Roth IRA

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Cons of the Mega Backdoor Roth IRA 1. It’s not easy to contribute beyond the tax-deferred contributions. 2. Not all employers offer Rollover Roth IRA options.

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